ADST secures $16.45 million CPO equipment order from US firm

NBNTV = Reporter Joo Hyun-woong | ADST, a subsidiary of Seongho Electronics, announced it has received a purchase order (PO) worth $16.45 million (approximately 23.5 billion won) for Co-Packaged Optics (CPO) manufacturing equipment from a company listed on the New York Stock Exchange.

The equipment being supplied consists of facilities that align optical fibers and lenses at the nanometer scale and inspect the quality of finished products. These tools will be used in the precision alignment and inspection processes required for producing optical communication components for Artificial Intelligence (AI) data centers.

CPO is a technology that places the optical engine near the ASIC, a core semiconductor in network switches. It is gaining traction as a next-generation optical communication technology that reduces data transmission distance, thereby lowering power consumption and signal loss compared to conventional methods.

In the CPO manufacturing process, 'active alignment' technology is utilized to measure optical output in real-time and identify optimal positions while moving optical components. Precise placement of components, such as optical fibers and lenses, is essential to ensure stable data transmission performance.

A key characteristic of CPO manufacturing is that it is difficult to replace or rework components once packaging is complete. Consequently, there is growing importance for precision equipment that can manage yield by reducing alignment errors and inspecting quality from the initial production stage.

Recently, the investment scope of the global AI data center market has expanded from securing high-performance Graphics Processing Units (GPU) and High Bandwidth Memory (HBM) to power, networks, and cooling infrastructure.

In a related report, Samil PwC Management Research Institute analyzed that AI infrastructure bottlenecks are shifting from GPUs and HBM toward power supply, data transmission networks, and cooling sectors. The report explains that high-speed, low-power optical communication infrastructure is necessary to support the large-scale computations required to connect tens of thousands of GPUs.

Major big tech and semiconductor companies are also ramping up investments to secure optical communication supply chains. NVIDIA is investing $2 billion each in optical device companies Lumentum and Coherent, and is pursuing plans to apply CPO technology to the Spectrum-6 network for its next-generation Rubin platform.

Meta is also reportedly signed an optical fiber cable supply contract worth up to $6 billion with Corning to secure optical communication infrastructure for its data centers.

Industry experts believe these investments will extend beyond the supply of components like optical fibers and optical devices to the manufacturing equipment market required for packaging, precision alignment, and quality inspection.

ADST's recent order is seen as a prime example of the trend where AI data center investment is expanding from component orders to the establishment of manufacturing infrastructure. The company plans to expand its supply of related equipment based on its precision alignment and inspection technologies used in the CPO process.